BBVA
Banco Bilbao Vizcaya Argentaria, S.A.
$22.37
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 33.2% below fair value
You pay
$22.37
Bear
$22.92
Fair
$33.48
Bull
$39.81
Bear
$22.92
+2.4%
ROTCE 14.5% → 2.01x TBV
Fair
$33.48
+49.6%
ROTCE 19.3% → 2.94x TBV
Bull
$39.81
+78.0%
ROTCE 22.2% → 3.50x TBV
Key Value Driver
ROTCE (19.3%) vs. cost of equity (9.2%)
Implied Market Multiple
1.97x
Summary
With ROTCE of 19.3% vs. 9.2% cost of equity, fair P/TBV is 2.94x on $11.38 tangible book, implying $33.48 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Financial statements were converted from EUR into USD using EURUSD at 1.1642 USD per EUR.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly